Arkansas Lawmakers To Consider Letting State Keep Funds From School Tax

LITTLE ROCK — Some state legislators voiced opposition Wednesday to a proposal backed by Gov. Mike Beebe for this week’s special session that would let the state control excess revenue that some school districts collect from a statewide property tax.

But by late afternoon Beebe said it appeared he had the support necessary to get the proposal passed in the special session that begins Thursday.

The proposal is in response to a 2012 Arkansas Supreme Court decision that said districts do not have to surrender to the state Department of Education money they collect under the statewide 25-mill property tax that exceeds the state-mandated per-student funding level.

Most districts’ collections under the 25-mill tax are below the mandated funding level, so the state provides them funding to make up the difference, but a few districts’ collections under the tax exceed the per-student minimum. Among them are the Fountain Lake and Eureka Springs school districts, which sued the state for the right to keep the excess money and won in the Supreme Court.

Beebe told reporters Wednesday the proposal he supports “corrects what we thought the law always was anyway before the 4-3 (Supreme Court) decision.”

The governor said he realizes that some lawmakers oppose the plan.

“There are a lot of them that are going to vote against it, particularly in some of those areas that are where those eight school districts are, and I don’t blame them,” Beebe said. “If I represented (one of) those eight school districts, that’s probably how I would vote, but I have to represent the whole state and have to look at the intent of the law.”

Beebe said legislative leaders have told him there are enough votes to get the proposal passed in the special session lawmakers will convene Thursday to address rising public school employee health insurance premiums.

Lawmakers questioned Wednesday were divided on the proposal.

Rep. Andrea Lea, R-Russellville, said she will vote against it.

“I think it is the most contentious bill by far. As it stands, I would be voting no,” Lea said. “They should get to keep that money.”

Sen. David Sanders, R-Little Rock, said he was disappointed the issue would be included in the special session called to address rising health insurance rates for public school employees.

“I think it distracts from the question at hand,” Sanders said. “It’s a very complicated issue, and the courts have ruled.”

Sen. Uvalde Lindsey, D-Fayetteville, said he will vote for the proposal.

“I believe it’s the intent of the legislation that came out of Lake View,” he said. “It makes it equal across the state.”

Sen. Johnny Key, R-Mountain Home, chairman of the Senate Education Committee, said he supports the proposal.

“I have read a lot about URT (Uniform Rate of Tax) … and based on everything I’ve read, the constitutional amendment and the subsequent action by the General Assembly says the URT is to be collected by the state for the benefit of all the school districts and that any district that wants to raise more than that can go above the 25 mills,” he said.

“It talks about raising … added extra funds, and I believe that means URT, call it a hybrid tax, state tax, whatever, that’s money that is supposed to be collected and used for all the districts, not to be retained by a district just by the nature of their property values,” Key said.

Sen. Jonathan Dismang, R-Beebe, said “part of the goal with the URT, for at least some of the members, is that those excess revenues are going to be collected to help replenish the facilities fund. So, that makes that bill more palatable.”

In the special session, lawmakers are expected to approve a plan to shore up the public employee health insurance system in part by tapping the state fund for school facilities improvements.